We have given Human Resource management – HRM case study of MAKAR Company which is based on Gained profit by missed opportunity & lost wealth. This case study can categorised under Training and Development, employee retention management, strategic human resource management, Human Capital Management. We will update post soon with case study solution.

HRM Case Study

“Makar” a textile manufacturing unit located in the city of Jaipur with enough infrastructure and good work force. The organisation is specialised in shirting and suiting particularly the supplies are done in Rajasthan only. The organisation is run by the CEO who is commonly known for well educated, experienced, business man with humanity approach. Mr. Mukund CEO “Makar” considered the employees as an competitive advantage of his organisation and want to keep the work force always updated to face the challenges from their competitors.

Mr.Mukund, who heads the production himself, developed a efficient top management group which includes Mr.Prem Heading marketing, Mrs.Mrunal leading HR and T&D, Mr.Vaidya leading finance. All this department heads are always been a supportive heads for the ideas of Mr.Mukund in handling the work force. They also believe that, satisfied, educated, dedicated workforce will be a key to success at any condition to any organisation. Money spent on employees will always be an investment to the organisation

Training and development becomes a day to activity in the organisation. Employees are been trained by well versed trainers in that area. The organisation also encourage the employees to do further studies as part of the career development programme and they get a helping hand from the organisation.

The employees of Makar are very much satisfied with these kind of support from the organisation and they realised that being with Makar their personal growth will be assured. Because of the above said things Makar had many advantages like highly trained and qualified work force, highest quality of supplies assured, less rate of attrition, dedicated workforce, meeting the targets on time, satisfied work force etc…

One day the employees of Makar were in deep Grief when the news hit the office that Mr. Mukund CEO decided to handover the charge to Mr. Mithun only son of Mr. Mukund who had completed his studies and returned to India.

Now it has been three months since Mr. Mithun take over the charge and from day one he started auditing in almost all the departments with a motto to reduce cost. And he got a strong statistics that the compensation is the highest cost bared by the company compared to any other cost incurred in the organisation.

So he called Mrs. Mrunal the head HR and asked her decide the plan for reducing the labour cost to 30% by way of Lay-off. Mrs. Mrunal got shocked by listening to this decision and said to Mr.Mithun that “ Sir it is my responsibility to tell you that the work force which we have is excellent, well trained, loyal and self motivated work force. In case of lay off such the competitors will take an advantage of that. We can think of other options rather than Layoff.”

Mr.Mithun was not in a position to listen to her words he said that “sorry Mrs.Mrunal I am not ready to review my decision and neither wants any alternatives for this I want this work to be done within a week”. Finally with all her regrets Mr. Mrunal reduced the workforce by 30%. In the other hand the employees who were waived of from Makar joined the competitors with a better package.

One day in his office Mr.Mithun was discussing with Mrs.Mrunal that the cost labour in the organisation has been reduced to great level which increases the net profit also. After listening to this Mrs.Mrunal said that “it is well said we have reduced the labour cost and increased the profit but it is truer that we have missed the great opportunity to grow more by losing our wealth to the competitors”

Questions:

1. “ Employees are the competitive of advantage of Makar” comment on this statement relating to the approach of Mr. Mukund CEO

2. How did you judge the actions taken by Mr . Mithun to reduce the cost of labour was it really a success one.

3. “We have gained the profit by losing our wealth” discuss the statement of Mrs.Mrunal and support her statement.

4. From the above said case find the opportunity which was missed by Makar due to the lay off as mentioned by Mrs. Mrunal.

Solutions:-

1. “Employees are the competitive advantage of Makar” comment on this statement relating to the approach of Mr. Mukund CEO

Competitive Advantage means the point where you specialised when compared to that of your competitors. That is an edge over your competitors. In the said case Mr. Mukund and his team enabled employees to get well trained and also encouraged to precede their further studies. Hence they become skilled, educated, well trained and quality employees.

When the employees are been considered as the competitive advantage of any organisation then it becom e a greater strength of that organisation. Because when the employees are the competitive advantage that means that they are well trained and they are much satisfied with the organisation same way a well trained and satisfied employee will produced products which are rich in quality.

To comment on the statement said by Mr.Mukund it is true that employees are the competitive advantage of Makar. The reasons why employees are considered so is a) they are well trained up to date b) they are educated c) skilled d) Habituated to cope up with change in technology e) producing high quality f) time bound etc.

2. How did you judge the actions taken by Mr. Mithun to reduce the cost of labour was it really a success one?

As soon as Mithun taken over the charge he wants to reduce the cost of production or you can say the overall expenses of the company in all means. When he noticed that the cost of labour is very high he didn’t analysed in the way why it is high and what the company is getting because of spending on it.

According to me the decision taken by Mr. Mithun is not a wise or successful Idea because :- a) Mr.Mukund has spend years together and invested lots of money to mould the employees in such

a way. Mr.Mithun decision will not allow him to encash the investment done by his father he

b) Mr.Mithun fire the employees from the organisation on whom they have invested because of which the competitors will get a chance to utilize the benefit of money that Makar had spend on the employees.

c) this decision may also reduce the level of motivation and morale of the remaining employees as the job security becomes a question mark in Makar.

3.“We have gained the profit by losing our wealth” discuss the statement of Mrs.Mrunal and support her statement.

Mrs.Mrunal HR head of Makar was opposing the decision of Mr.Mithun from starting itself. Because being a HR she was clear that the amount spent on employees for training is not an expenses but it is an investment. But Mithun didn’t listen to her words. And being an employee she has been forced to separate some of the employees from MAKAR. And she did it. But she is not happy for what she had done. So she said this statement. This statement is very well suitable to Makar. Let us separate this statement in two parts and discuss “We have gained the profit + by + losing our wealth”

In this statement

“We have gained the profit” means by reducing the workforce Makar has reduced the expenses which resulted in increase in the profit

“losing our wealth” means Makar has invested lot of money on employees by way of training and made them a strong workforce which is also a competitive advantage to Makar. By separating them from Makar it is can be said that Makar lost its wealth and wealth here denotes the highly skilled employees.

4.From the above said case find the opportunity which was missed by Makar due to the lay off as mentioned by Mrs.Mrunal.

Mrs.Mrunal said that Makar has missed a good opportunity by means of Layoff. The opportunity mentioned here is :-

When we go through the case carefully it was mentioned that Makar has a good infrastructure and work force but it is serving to the need of Rajasthan only. And it is also mentioned that Makar has gained a good value among the customers as they don’t have any negative point to say about Makar.

In this situation when it is noticed that Makar have excess workforce which is well trained the CEO should that the option of extending the business to nearby states. This will develop the business and increase the profit.

Expansion of Business is the Opportunity which was Mentioned by Mrs. Mrunal in the case.